- The investment from Wells Fargo takes Elliptic’s entire Series B funding round from $23 million to $28 million.
- Wells Fargo also stands to be the first major bank in the U.S. that has invested into a blockchain analysis firm, but it is not the first one.
- Elliptic Discovery hopes to allow more banks to be aware of the partnerships they build with cryptocurrency exchanges.
Financial services giant and the 3rd largest bank in the United States, Wells Fargo has invested $5 million into a blockchain analytics startup Elliptic through its capital provider Wells Fargo Strategic Capital (WFSC).
The investment from Wells Fargo takes Elliptic’s entire Series B funding round from $23 million to $28 million. The blockchain analytics firm has raised over $40 million in investments so far, including Wells Fargo.
The investment is being mostly pumped into Elliptic’s latest product, Elliptic Discovery, which aims to build relationships between banks and cryptocurrency exchanges.
Elliptic Discovery’s core utility lies in providing banks with an analysis of over 200 cryptocurrency exchanges on everything from how the exchange conducts know-your-customer (KYC) checks to the regulations that the exchange is subject to and its compliance records.
This will help banks understand whether customer money is passing through exchanges that are compliant to regulations and that there is no fraud or money laundering involved.
Elliptic Discovery hopes to allow more banks to be aware of the partnerships they build with cryptocurrency exchanges to know whether they can be trusted. As Elliptic’s co-founder told CoinDesk,
Cryptocurrency exchanges have lacked strong backing from the larger banking firms due to the perceived risk of being involved in potentially illegal transactions.
Smaller financial institutions, on the other hand, like the Silvergate and Signature in the U.S., co-operated with exchanges. Elliptic Discovery will help close this gap and help banks gain more insight into the “guts” of the cryptocurrency exchanges promoting trust in future partnerships.
As cryptocurrencies gain more mainstream traction, law enforcement agencies and regulatory firms are all scrambling upon crypto-exchanges in order to make sure the end customer is secured.
Bank-backed analysis firms like Elliptic and Chainalysis have a very potentially positive future ahead of them as they cater to regulations agencies in providing data on exchanges.
Wells Fargo also stands to be the first major bank in the U.S. that has invested into a blockchain analysis firm, but it is not the first one. In September 2019, SBI Holdings, a Japan-based banking group, invested $10 million into Elliptic for its Asian expansion.
Wells Fargo’s strategic managing director made a statement saying that the bank is looking forward to helping Elliptic grow and move into the next phases of their product.